No one likes dealing with late payments. In a perfect world, you’d provide the goods and services that your clients request and then get paid according to your payment terms.
Unfortunately, for the vast majority of smaller businesses, that just isn’t the case. Collectively, UK SMEs are owed £50 billion in late payments, with each business having an average of six outstanding invoices at any one time.
So, since late payments are fact of life for many businesses, how do you go about getting paid without succumbing to a constant feeling of cringing awkwardness?
We have got a few tips that will help you.
Understand that you’re 100% in the right
Much of the cringe factor that comes with chasing late payments is a perfectly reasonable desire to be polite and avoid conflict with potentially valuable customers.
However, the reality is that you have provided a service or a product and it’s the responsibility of your customer to pay in a timely manner.
You are not being rude or pushy by chasing for payment. You are entitled to the monies owed and the debtors are making you put in the extra effort to work for a payment you’ve already earned.
Make your customers aware of your terms and conditions and enforce them
It is a lot easier to start pursuing late payments when you are entirely sure you aren’t the one at fault.
Not only can emphasising and consistently enforcing your payment terms put you on a solid footing to chase late invoices, but it also encourages your client to pay in a timely manner because they do not have any excuse not to.
Put late payment charges in place
When bringing on new customers, send them invoice payment terms that will be contractually agreed terms of payment for your ongoing business relationship. These will state when you expect your customers to pay you and is the function of payment terms. These should state
- The payment date: when you expect to be paid by the customer. Most often this is 30 days, but it can be one week, or more.
- The invoice due date: State the actual date on which the invoice should be paid.
- The currency: This is important if you are trading outside of your country.
- The payment methods such as credit card, bank transfer, etc.
Having your payment terms stately clearly on your invoices makes it easier to chase up any late payments.
Use scripted email reminders and automation
For most people, the best payment chasing email is the one they don’t have to write or send. We’ve already put together a range of email templates to help you get late-paying customers to pay invoices on time.
These emails templates only have to be slightly edited with the specific details of your invoice, saving you both time and the effort of writing out a carefully worded email.
Using an automated credit control solution like Chaser means you can streamline the entire process, making it far less time-consuming.
Our automated system sends out a warning to let your customer know an invoice is coming, an invoice with a link to a dedicated payment portal, escalating reminders if payment is not made, and a thank you email when payment is made.
Outsource it to the professionals
If you don’t have the time to dedicate to a consistent approach to credit control, maybe it’s time to think about handing it over to the experts. Outsourcing your accounts receivables gives you access to all the benefits of an in-house credit controller at a fraction of the cost.
Chaser’s dedicated and experienced credit control teams are experts in enacting debt recovery measures without endangering your valuable customer relationships. Chaser gets you paid, on average, 16-days soon and we recover around 80 per cent of our client’s outstanding invoices.
Our services are simple, easy to use and completely transparent. We’ll keep you in the loop at all times and you’ll be able to review our communications with your customers.
For the 20 per cent of bad debt our polite persistence can’t recover, our professional debt collections team is standing by to mediate between you and your clients.
We specialise in getting you paid what you’re owed without impacting your invaluable customer relationships.
Don’t cringe
Chaser’s mission is to create a world where all people and businesses have the confidence they will get paid for their work. Businesses don’t have to worry about getting paid. Contact us to learn about the software or services that can help you overcome your payment challenges.
